Motorola’s acquisition of broadband wireless equipment vendor NextNet Wireless this week comes as the vendor’s wireline broadband business may be approaching a crossroads.

Through its 2004 acquisition of Quantum Bridge, Motorola serves as a secondary supplier of passive optical networking (PON) equipment to Verizon Communications’ fiber-to-the-premises rollout. But analysts believe at least 80% of that business goes to Verizon’s primary supplier, Tellabs.

Verizon and AT&T are expected to select suppliers to supply the next generation of PON gear, gigabit PON (GPON) soon. Though analysts regard Motorola as one of five vendors most likely to win a Bell GPON contract, the failure to win a contract may incite Motorola to evaluate its strategy in the wireline equipment market, according to UBS Investment Research.

“Motorola has yet to gain traction outside of its second-vendor status in [Verizon’s] PON deployment,” UBS wrote in a research note issued last week. “Should Motorola fail to secure GPON business, this could hasten a strategic decision regarding [its wireline] business. With little access market share or wireline market share in general, we view large-scale wireline M&A as unlikely.”

This is not the first time this year that analysts have questioned Motorola’s interest in the wireline space. In April, as rumors swirled suggesting Motorola might be interested in acquiring Siemens’ telecom division (which later joined a joint venture with Nokia), Infonetics Research analyst Jeff Heynen wrote, “[Motorola] is definitely interested in Siemens' wireless products and customers but appears disinterested in their wireline division.”

Motorola took 9% of the global market for wireless infrastructure in 2005, according to UBS. It is overshadowed there not just by Ericsson, which took 30% of the market, but by new combinations such as Nokia/Siemens--which claims 25% of the market--and Alcatel/Lucent, which claims 17%.